WS #15051

The geopolitical risk premium is intensifying as Iran's threat to blockade the Strait of Hormuz moves from rhetoric to market reality, driving oil prices higher and pressuring global equities. This escalation is compounded by a structural shift in the energy sector, marked by Shell's approval for a $23 billion expansion of the LNG Canada project, signaling massive long-term supply commitments even as near-term transit risks spike. Concurrently, the US 30-year Treasury yield hitting a 24-year high is exerting a heavy drag on growth valuations, forcing a rotation out of high-multiple tech and into value/energy plays. In the technology sector, the prevailing thesis is bifurcated. While the broader market faces headwinds from rising rates and geopolitical uncertainty, specific sub-sectors are seeing strong catalysts. Micron is poised for a significant earnings beat driven by AI memory scarcity, and AMD continues to expand its physical AI footprint with the $8.2B World Labs acquisition. However, the broader AI narrative faces scrutiny as Anthropic's IPO filing highlights 'existential' risks, and sentiment remains mixed on consumer hardware as Oura postpones its IPO due to market uncertainty. The macro environment is further complicated by a cooling in crypto ETF inflows, suggesting a temporary pause in risk appetite despite Bitcoin's rebound above $84,000.